Global markets have been in turmoil as investors fret over the future of the $85-billion-a-month Fed stimulus. Traders are worried that improving conditions mean the central bank will conclude the US economy needs less help.

“All the fuss surrounding tapering has once again unnecessarily panicked investors into selling their equity positions,” Capital Spreads dealer William Nicholls said.

“At some point investors will remember that sooner-than-expected tapering is a trade-off with having a stronger economy,” he said.

The Federal Reserve prepares to release minutes of its latest meeting on Wednesday.

Emerging markets in particular suffered from the jitters and their currencies saw heavy selling with the Indian rupee hitting another record low against the dollar. Turkey also raised its overnight rate to support the lira.

“Asian markets have benefited hugely on easy Fed cash over the years but with a reduction in liquidity due to tapering to contend with, there is growing concern that capital outflows from emerging markets will rapidly accelerate.”

In company news, Europe’s leading miners lost ground by news of a big loss for Glencore Xstrata.

The mining giant reported a switch into a first-half net loss of $8.9 billion on Tuesday owing mainly to a goodwill write-down of $7.6 billion.

The share price slid 1.59 percent to close at 297.15 pence.

The group said the charge reflected the poor outlook for the mining industry and increased risks for big expansion projects and for the development of new sites.

In more gloomy news, Anglo-Australian mining giant BHP Billiton on Tuesday said net profit slumped 29.5 percent to US$10.88 billion in the year to June, citing slowing global growth and commodity price volatility.

It was a dark day also for Italian aerospace group Finmeccanica — whose shares were even briefly suspended — after a potential order for 35 choppers was suspended and Belgium’s railway operator demanded compensation for problems with some high-speed trains.

The share ended 5.2 percent lower at 3.96 euros.

In foreign exchange trading on Tuesday, the European single currency stood at $1.3427 compared with $1.3334 late in New York on Monday.

The dollar eased to 97.17 yen from 97.56 yen.

Sterling fell back after a firm run to 85.65 pence against the euro, but climbed to $1.5676 against the dollar.

And India’s rupee hit a new all-time low against the dollar on continuing fears that recent measures to stabilise the currency and kickstart the flagging economy will not work.

On the London Bullion Market, the price of gold increased to $1,372.50 an ounce from $1,365 on Monday.

Despite the strains, Wall Street was up, helped by better-than-expected quarterly earnings from Home Depot and electronics retailer Best Buy.

In midday trading, the Dow Jones Industrial Average was up 0.28 percent, while the broad-based S&P 500 rose 0.52 percent and the tech-rich Nasdaq Composite Index added 0.65 percent.

Yields on US, German and British government bonds retreated after having reached their highest levels this year on Monday.